2024 (6) TMI 539 - AT - Income Tax

Grant of registration u/s 80G(5)(iii) - Validity of provisional registration and subsequent denial of regular registration - registration denied as assessee has commenced its activities and application for regular registration has been moved beyond six months of the commencement of activities, therefore, this application is not maintainable - HELD THAT - The assessee has already been granted registration under the old regime as noticed by us. The copy of such certificate is available on record. It is a Bar Association existing since 1924, though it has applied for grant of registration under section 12A and 80G quite late but its activities have been gone into by the authority and those activities were found to be charitable in nature. There is no change in those activities, therefore, there cannot be any doubt about the activities of the assessee for grant of regular registration under section 80G(5)(iii). The procedure adopted by the ld. CIT(Exemption) was incorrect to grant provisional certificate to the assessee at the first stage and then, for denying the regular certificate under section 80G(5)(iii) of the Income Tax Act. The application moved by the assessee under Form No. 10AB, Rule 17A was not time barred because the time limit considered by the ld. CIT(Exemption) in paragraph no. 11 of the impugned order as 30th September, 2022 is concerned, it has been extended from time to time. Therefore, this application is deemed to be well in time by keeping in mind the latest Circular issued by the Board. As observed earlier, the activities of the Society are similar. There is no change on such activities. Registration under section 80G(5)(vi) was granted in perpetuate vide order dated 13th March, 2019. This registration was cancelled because of change of law by the Parliament. Otherwise, there is no change in the activity of the Bar Association. Thus we deem it appropriate to allow this application and direct the ld. CIT(Exemption) to grant registration to the assessee under section 80G(5)(iii) - Appeal of the assessee is allowed.

Summary

Issues Involved:
1. Rejection of application for grant of registration u/s 80G(5)(iii).
2. Interpretation of time limits for filing applications under the amended provisions.
3. Validity of provisional registration and subsequent denial of regular registration.

Summary:

1. Rejection of Application for Grant of Registration u/s 80G(5)(iii):
The assessee, a registered society, appealed against the order of the Commissioner of Income Tax (Exemption), Kolkata, which rejected their application for registration u/s 80G(5)(iii) of the Income Tax Act. The society had been enjoying registration u/s 12A and exemption u/s 80G(5)(vi) since 2019. However, due to amendments effective from 1st April 2021, the assessee filed an application in Form No. 10AB for regular registration u/s 80G(5)(iii), which was rejected by the CIT(Exemption) on the grounds that the application was not filed within the stipulated time frame.

2. Interpretation of Time Limits for Filing Applications Under the Amended Provisions:
The CIT(Exemption) held that the application should have been moved at least six months prior to the expiry of the provisional approval or within six months of the commencement of its activities, whichever is earlier. The assessee argued that the application was filed within the due date and that the CIT(Exemption) failed to comprehend the true procedure required to be followed. The Tribunal noted that the CBDT had extended the time limits for filing applications in Form No. 10A/10AB multiple times, and the latest extension was up to the end of June 2024.

3. Validity of Provisional Registration and Subsequent Denial of Regular Registration:
The Tribunal observed that the assessee had been granted provisional registration, but the CIT(Exemption) should have granted regular registration at the first instance. The Tribunal found that the CIT(Exemption) misconstrued the provisions and facts, as the activities of the society were charitable and unchanged. The Tribunal directed the CIT(Exemption) to grant registration to the assessee u/s 80G(5)(iii), considering the past history and complete material available.

Conclusion:
The Tribunal allowed the appeal of the assessee, directing the CIT(Exemption) to grant registration u/s 80G(5)(iii) and issue the necessary certificate in due course. The order was pronounced in the open Court on 11/06/2024.